Tax Basics
What is a tax?
Money paid to the government to fund public services
Income tax
When are taxes usually due?
April 15th
Level of government that collects income tax
Federal government
Money you earn from a job
Income
Why do people pay taxes?
To pay for things like roads, schools, and defense
Sales tax
Form used by most individuals to file taxes?
1040 form
who decides tax laws?
Congress
Money subtracted from income before taxes
Deduction
What happens if you don't pay taxes?
Penalties, fines, or legal trouble
Tax on property like houses
Property tax
Money you get back if you overpay taxes
Tax refund
What are taxes used to fund
Public services
Direct reduction of taxes owed
Tax credit
Who collects federal taxes in the U.S.?
The IRS (international revenue service)
Tax on profits from selling investments
Capital gains tax
Money you still owe after filing
Tax liability
State governments mainly use taxes for what?
Education, roads, public safety
Percentage at which income is taxed
Tax rate
What is the main source of income for the U.S. government?
Income taxes
Tax paid on inherited money or property
Estate tax
What filing status might a married couple use?
Married filing jointly
What is the name for government spending vs income plan?
Budget
Total income after deductions
Taxable income